Follow-up on Whole Foods
Cogent analysis at a blog called Truth on the Market that makes my point about the broken antitrust system but even more forcefully. The article is written by Geoffrey Manne, a Lewis & Clark law professor who specializes in antitrust. He derides the thinking of the regulators on this one.
The FTC doesn't claim that the relevant market is the market for natural and organic food. The market is for natural and organic supermarket. In other words, there is a serious risk of conflating a "market" for business purposes with an actual antitrust-relevant market….
Whole Foods and Wild Oats may view themselves as operating in a different world than Wal-Mart. But their self-characterization is largely irrelevant. What matters is whether customers who shop at Whole Foods would shop elsewhere for substitute products if Whole Food's prices rose too much. The implicit notion that the availability of organic foods at Wal-Mart (to say nothing of pretty much every other grocery store in the US today!) exerts little or no competitive pressure on prices at Whole Foods seems facially silly.
In other words, in this case it's not the product that is somehow likely to be denied or made more expensive to customers, it's the experience of going to a high-end natural food markets with soft lighting and exposed beams rather than checking out the more proletarian organics at Safeway of Wal-Mart. As Manne writes, " I’d be laughing hysterically if I didn’t find this conception of market definition ludicrous almost beyond belief."
